Bitcoin On-Chain Data Signals ‘End Of Deep Value Era’: Hedge Fund CEO

In a latest collection of posts on X (previously Twitter), Charles Edwards, the founder and CEO of Capriole Investments, has declared the tip of the “deep worth period” for Bitcoin, introducing what he refers to as the start of the “Bitcoin Momentum period.” Edwards’ detailed evaluation entails ten on-chain metrics he developed, which collectively recommend a major shift within the cryptocurrency’s valuation and market dynamics.

What Bitcoin On-Chain Information Says

One of many core metrics, Bitcoin’s Power Worth, now locations BTC’s worth at $70,000. Edwards explains, “Bitcoin’s intrinsic worth priced from the pure Joules of vitality into the community solely. At the moment at $70K, making Bitcoin pretty valued for the primary time in 2 yrs.”

The SLRV Ribbons, one other metric offered by Edwards, tracks the ratio of short-term to long-term holders, with present tendencies indicating sturdy potential for high-return durations in BTC investments. “SLRV Ribbon uptrends often isolate the most effective returning Bitcoin risk-on durations. The development nonetheless appears very sturdy at this time, Edwards famous.

Dynamic Vary NVT Sign provides worth bands to BTC’s “PE Ratio” (NVT), which compares on-chain quantity to market cap. Based on Edwards, this metric has just lately returned to a state of relative worth after being overvalued. This implies a normalization in valuation metrics after a interval of overvaluation.

Within the context of Manufacturing Price, the cryptocurrency has surpassed its manufacturing prices, buoyed by the Ordinals payment enhance, indicating that mining is once more extremely worthwhile and doubtlessly resulting in larger repricing. Edwards famous that “Bitcoin broke out of the price of manufacturing in latest months… However the period of worth Bitcoin is over.”

The Hash Ribbons indicator, which Edwards described as his first on-chain metric, reveals “widening progress in Hash Charge regionally,” an indicator of miners’ confidence and community well being.

A major commentary got here from the Miner Promote Strain metric. Edwards identified, “It’s VERY excessive proper now, akin to 2017. This highlights just a few issues: miners are v. worthwhile and locking that in, and ETF demand is draining provide.”

The BTC Yardstick and Hodler Progress Charge metrics point out that BTC may be within the early levels of a bull run, with a rising variety of holders starting to promote into income. Nonetheless, Edwards suggests, “Primarily based on prior durations to cycle peaks, we should always have a while to go.”

Provide Delta and Bitcoin Heater, respectively, present insights into the ratio of short-term to long-term holders and the aggregated market leverage. Each metrics recommend situations that traditionally precede important market actions.

Early Innings, However Deep Worth Is Gone

Lastly, Edwards favors the BTC Macro Index, a machine studying mannequin aggregating over 60 on-chain and macro metrics, which at the moment indicators sturdy market growth. “We’re in sturdy growth, within the very early innings of a typical Bitcoin cycle,” Edwards famous.

Summarizing, Edwards’ evaluation foresees a multi-month uptrend for BTC, albeit with potential for volatility and pullbacks because of the accelerated tempo of market developments in 2024 and the method of the following Halving. Edwards boldly states, “All metrics typically agree {that a} very giant multi-month uptrend will seemingly emerge from right here.”

Edwards concludes, “Bitcoin’s deep worth is gone. That ship has sailed. You had 2 years to choose up undervalued BTC. As an alternative an thrilling new chapter has begun… Welcome to the Bitcoin Momentum period.”

At press time, BTC traded at $66,262.

Featured picture from YouTube, chart from TradingView.com